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Reviewing the pros and cons of filing bankruptcy

Not many people are comfortable talking about ‘bankruptcy’, which has a negative sound to it. While bankruptcy is not for everyone, it could be a smart choice for those who have huge debts to pay and are unable to manage their situation. Known law firms can guide you on how to file for bankruptcy in Katy, and it can be a long-drawn process. In this post, we are reviewing the pros and cons of filing bankruptcy, so that you can make a smart decision.

The obvious advantages

Just when you file for bankruptcy, there is an automatic stay on creditor actions and wage garnishments stop. No more getting multiple calls from debt collection lawyers and agencies and threats of lawsuits. Most personal bankruptcy cases are resolved within months, and they can cost less than other options. Depending on your circumstances, you may be able to improve your credit score in due time. While the consequences of filing bankruptcy may last for at least seven years, you have the freedom to live within your income and work out your finances.

On the flip side

Just because you have debts doesn’t mean that bankruptcy is the right choice for you. In fact, this may be necessary for many people but is the right resort. Bankruptcy will also not discharge all of your debts. For instance, if you are required to pay student loans or alimony to a divorced spouse, you will still have those liabilities. You may also lose some of the assets that you want to keep and this can impact your credit. You will lose your credit cards, and while many companies may offer unsecured credit cards, the interest rate would be insanely high.

Talk to a lawyer

Should you file for bankruptcy? Is this the last option you have? Can you consider other ways of debt consolidation? These are questions for which answers are unique to your circumstances. Let a lawyer help you with bankruptcy and everything else in between. They can answer your questions, find an optimal way out, and don’t shy away from discussing your financial concerns. Bankruptcy doesn’t have to be the end of the road for anyone, but when planned rightly, you can start from scratch and work on your credit score.

A good lawyer can also assist with options that wouldn’t impact your financial and social status like bankruptcy, so you can take a call accordingly.

Amanda Peterson: Amanda is an economist turned blogger who provides readers with an in-depth look at macroeconomic trends and their impact on businesses.